Manchester-based soft furnishings and window hardware supplier Evans Textiles was sold for almost £2m in a pre-pack deal after being placed into administration.
Kerry Bailey and Mark Thornton, of BDO LLP, were appointed as joint administrators of soft furnishings manufacturer Evans Textile (Sales) Limited on 24 December 2024.
In the build up to its administration, the company had been in discussions with the Mzuri Group, which owns a number of blind and shutter businesses, for over 18 months regarding a potential share acquisition through its subsidiary Mzuri Textiles Ltd.
However, following a due diligence process, the group opted out of any deal as it was no longer prepared to acquire the company’s shares on a solvent basis.
Following the insolvency of the subsidiaries and general downturn in trade, Evans Textiles experienced challenging liquidity and mounting creditor pressure due, in part, as a result of accumulating legacy debts and the implementation of a new IT system.
Further cash flow pressure and supplier terms followed, which put the company into the position of not being able to fulfil its liabilities when falling due and was deemed as insolvent.
Upon entering administration, the company was marketed for sale with 78 potential interested parties being contacted, which generated three responses. One offer was tabled, which was from the purchaser Mzuri Textiles Ltd for a sum of £1.8m. All 49 employees were transferred under TUPE. The sum was paid in full on completion.
As for creditors, HSBC is owed £300,000 as a secured creditor, which is expected to be repaid in full, while HSBC Invoice Finance (HIF), owed £1.2m, has also been repaid in full. Loan Note holders, owed a sum of £1m, are expected to suffer a shortfall, while the HMRC, owed £487,000, could receive some distribution.
Meanwhile, unsecured creditor claims totalled £2.1m and are expected to suffer a shortfall of the entire amount. In total, creditors are expected to suffer a shortfall of over £3m.
The purchaser, Mzuri Textiles Ltd, now trading as Evans Textiles, was incorporated on 17 October 2024.
